Clean audits a rarity

The Consolidated General Report on national and provincial audit outcomes 2011-12, released on Tuesday, revealed that of the total 536 audited entities, only 22% had received clean audits, with 279 receiving financially unqualified audit options with findings. This was compared to 279 in the previous year. Seventy four received qualified opinions while 17 received an adverse opinion or disclaimer. Thirty-one of the audits were outstanding due to non -submission of financial statements.

A qualified audit is obtained when financial statements are found to have material misstatements - when information omitted from financial statements or information that is incorrect - in specific amounts or there is not enough evidence for the auditor to conclude specific amounts.

An adverse audit opinion means that the financial statements submitted contain misstatements that are not confined to specific amounts where errors are found to be pervasive.

A disclaimer is obtained when documents are either missing on which to base an audit opinion.

"The report does place a lot of emphasis on the fact that we do need to sustain the way in which we manage the administration of government. We are talking about a report that is showing a regression broadly of the audit outcomes when it comes to clean audits," Auditor General (AG) Terence Nombembe said on Tuesday.

At a media briefing in Pretoria, the AG said that his office took comfort in the positive response from government in its willingness to improve the situation.

"To a large extent what makes us comfortable is the response that we're receiving in relation to the action that has happened since this report was out. This for us is important. We support the issue of how do we sustain the perfection of basic internal controls," he said.

The issues mentioned in the report had to been considered during discussions with ministers, premiers and MECs, among others.

Stumbling blocks

Nombembe said in the past it had been difficult to engage "with that layer of government" but that had changed.

"We've learnt of stumbling blocks which have given rise to the regression we're talking about. We're at a stage where we know what it is that is keeping us slightly backwards but rather what it is that we need to do to recover from that situation. That is what we want to emphasise," he explained.

There was still a need to focus on service delivery (or predetermined objectives), supply chain management and well as issues of human resource management.

"We're still seeing a need to focus on these areas that required our previous concentration. The issue of service delivery is something whose administration in government still needs to be strengthened," he said.

Some of government's announcements aimed at bolstering the public sector's clean administration drive is government's plan to put in place measures to re-skill public servants on the basics of the Public Finance Management Act as well as Public Service and Administration Minister Lindiwe Sisulu's announcement that her department will soon introduce legislation that will prohibit public servants from doing business with government.

The public service commission, the Free State Legislature together with 28 public entities formed part of the 33 auditees that addressed weaknesses highlighted in their previous year's audits and moved to clean audit results.

Western Cape achieves clean audit, again

The 78 auditees that were able to maintain their previous year's clean audit included the provincial treasuries of the Free State Premier's office, the Western Cape Legislature and the Department of Public Enterprises.

Of those that regressed from clean audit options is the Gauteng and KwaZulu-Natal Premier's Offices, among others.

Sisulu, as well as Minister in the Presidency for Performance Monitoring and Evaluation, Collins Chabane who were present at the briefing, welcomed the report.